Suzlon Energy Limited

H1 FY18

10 November 2017
 Disclaimer

This presentation and the accompanying slides (the Presentation), which have been prepared by Suzlon Energy Limited (the Company), have been
prepared solely for information purposes and DOES not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
and shall not form the basis of or be relied on in connection with any contract or binding commitment whatsoever. The Presentation is not intended to
form the basis of any investment decision by a prospective investor. No offering of securities of the Company will be made except by means of a
statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes
no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, reliability or fairness of the
contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any
liability in respect of the contents of or any omission from, this Presentation is expressly excluded. In particular, but without prejudice to the generality of
the foregoing, no representation or warranty whatsoever is given in relation to the reasonableness or achievability of the projections contained in the
Presentation or in relation to the bases and assumptions underlying such projections and you must satisfy yourself in relation to the reasonableness,
achievability and accuracy thereof.
Certain matters discussed in this Presentation may contain statements regarding the Companys market opportunity and business prospects that are
individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to
known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the
performance of the Indian economy and of the economies of various international markets, the performance of the wind power industry in India and
world-wide, the Companys ability to successfully implement its strategy, the Companys future levels of growth and expansion, technological
implementation, changes and advancements, changes in revenue, income or cash flows, the Companys market preferences and its exposure to market
risks, as well as other risks. The Companys actual results, levels of activity, performance or achievements could differ materially and adversely from
results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this
Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and
the Company is not responsible for such third party statements and projections.
No responsibility or liability is accepted for any loss or damage howsoever arising that you may suffer as a result of this Presentation and any and all
responsibility and liability is expressly disclaimed by the Management, the Shareholders and the Company or any of them or any of their respective
directors, officers, affiliates, employees, advisers or agents.
No offering of the Companys securities will be registered under the U.S. Securities Act of 1933, as amended (the Securities Act). Accordingly, unless
an exemption from registration under the Securities Act is available, the Companys securities may not be offered, sold, resold, delivered or distributed,
directly or indirectly, into the United States or to, or for the account or benefit of, any U.S. Person (as defined in regulation S under the Securities Act).
The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should
inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of such
jurisdiction.

2
 FY18: Year of Transition

3
 FY18: Strategy During Transition Period

Volume Uncertainty

Suzlon USP Suzlon Strategy

Target high market share of bid volumes through

Execution of potential PPA backed orders
Strategic customer tie ups (25 40% Share)
Capitalizing strength in captive & PSU customer base
Best in class technology and project pipeline
Stable revenue base from 14+GW fleet under service
Targeting >50% market share of Captive Market
Third party component sale in SE Forge
Exploring select international markets on lean cost structure

Declining Tariff, Increased Competition

Suzlon USP Suzlon Strategy

Best in class technology, execution track record & service
Turnkey and end-to-end solution provider
Strong project pipeline across windy states
Strong & diverse pan India customer base
Vertically integrated manufacturing
22+ years of leadership track record
10% LCOE reduction through technology
Accelerate project pipeline investment
COGS optimization through technology, value engineering
& vendor negotiation
Focused fixed cost optimization
Interest cost reduction by refinancing high cost debt

Opportunities from short term adversities

FY19 volumes expected to be 6+ GW

4 Increase in Suzlon market share
 FY19: Strong Volume Visibility

Central Auctions Completed 2.2 GW

Central Level Auctions
SECI 1 1,050 MW Completed
SECI 2 1,100 MW Completed
H2 FY18 target for Central Auctions 4.5 GW

State Level Auctions

TN 500 MW Completed
State Auctions under Process 1.0 GW GJ 500 MW In Process
RJ Under Discussion
MP Under Discussion

Central PSU Tenders 309 MW Central PSU Tenders

NTPC 250 MW In Process
Various 59 MW In Process

Strong Captive + PSU Demand (FY19 E) 500 MW

5 Strong outlook for FY19 (6+ GW) and beyond

 Poised To Become A 10+ GW Market

India Annual Wind Market Potential Size and Segmentation

1 GW

3-4 GW

8-10 GW

4-6 GW

Central Auctions State Auctions Captive / PSU Annual Market

Central Auctions State Auctions

Power Consuming State Non Wind States Wind States
Project Installations Windy State Windy State
Project Grid Connectivity Central Grid State Grid
PPA Counter Party SECI / PTC Respective State DISCOM
Annual Market Size depends on Non Windy State Power Demand Windy State Power Demand

6 High volume market

 Positive Aspects of Competitive Bidding

Until FY17 FY19 onwards

Pan India Demand

Demand from Wind States only
(Wind + Non Wind States)

FiT + Incentive Regime Auction based / Market Based pricing

(High tariff uncertainties) (Reduced uncertainties)
(Reluctance from DISCOM) (Most competitive source of power)

Back Ended Volume

Reduced Seasonality in Volumes
(H2 typically 60-70% of full year volumes)
(Optimized Working Capital)
(Inefficient Working Capital)

Moderate scale Order Size (50 100 MW) Large Scale Orders (200-250 MW)

High Regulatory Risk Reduced Regulatory Risk

(Back ended PPA signing (upfront signing of PPAs and tariff
Tariff depending on commissioning timing) determination)

7 India wind industry is transforming

 Suzlon Best Positioned in Auction Regime

Auction Regime Path Ahead

Reduced Risk Profile

Reduced Counterparty Risk
Reduced grid risk
25 years PPA
Lower Cost of Capital
Lower Power Cost
Lower Cost of Debt +
Longer Maturity Profile
Lower Cost of Equity
Technology Market Expansion
Increased generation
Greater reliability
Lower LCOE

Suzlon Competitive Edge

Cost Competitiveness Strong Market Positioning

Large Scale Operations Robust & Proven Technology

Vertically Integrated Manufacturing 2+ Decades Track Record
Highest degree of localization Strong Customer Relationships
In-house Technology Pan India Project Pipeline

8 To strongly benefit from market expansion through auctions

 Financial Update

9
 H1 FY18 Performance Despite Transition Period

Despite Ongoing Transition period

527 MW Delivery Volumes

3,852 Cr. Revenues

$76M FCCBs converted (Debt Reduction)

Despite Lower Operating Leverage

15.1% EBITDA margins(1)

Rs. 117 crs Reported PAT

94 Days NWC (Vs 89 days YoY)

10 Delivering performance in challenging period

(1) EBITDA Margin is pre-FX
 H1 FY18 Result Snapshot

( Crs.)

Particulars H1 FY18 H1 FY17

Unaudited Unaudited

Revenue 3,852 4,384 Transition period impacted volume

Gross Profit 1,659 1,995 Revenue Mix impacted margins
Gross Margin 43.1% 45.5% (19% Solar Volume Share)

Employee Expenses 409 514

Result of ongoing optimization efforts
Other Expenses (net) 668 745
EBITDA (Pre FX) 582 736 Reflection of Gross Profit reduction due to
EBITDA Margin (Pre FX) 15.1% 16.8% Solar

Depreciation 161 173

Net Finance Cost 589 568 Due to higher working capital debt
Taxes, Non Controlling Interest & Others 28 17
Net Profit (Pre Fx and Ex. Items) -196 -22
Exchange Loss / (Gain) 141 -3 Primarily Translational
Gain on de-recognition of asset and liability and
Exceptional Loss / (Gain) -455 0 release of foreign currency translation gain on
account of overseas business subsidiary
Reported Net Profit 117 -20

11 Performance despite temporary industry standstill

 Q2 FY18 Result Snapshot

( Crs.)

Particulars Q2 FY18 Q2 FY17

Unaudited Unaudited

Revenue 1,187 2,736 Transition period impacted volume

Gross Profit 557 1,268
Gross Margin 46.9% 46.3%
Employee Expenses 208 257
Optimization efforts + Lower volumes
Other Expenses (net) 242 452
EBITDA (Pre FX) 107 559
Lower Operating Leverage
EBITDA Margin (Pre FX) 9.0% 20.4%
Depreciation 79 92
Net Finance Cost 303 276 Due to higher working capital debt
Taxes, Non Controlling Interest & Others 12 7
Net Profit (Pre Fx and Ex. Items) -288 184
Exchange Loss / (Gain) 99 -60 Primarily Translational
Gain on de-recognition of asset and liability and
Exceptional Items -455 0 release of foreign currency translation gain on
account of overseas business subsidiary
Reported Net Profit 68 244

12 Transition period impacting volumes

 H1 Deliveries

Wind Solar Mix Customer Mix - Wind (%) Product Mix - Wind (%)

Others
Solar S9x
Captive 6%
19% 21%
14%

81% 80% 79%

Wind IPP / Utilities S111x

>30% volumes from Solar and Captive

New products gaining traction

13 Right customer and product mix supports volume and profitability

 Order Backlog

Wind

SECI I PPA based 250 MW

Firm Backlog 670 SECI II PPA based 252 MW

(As on Date)
MW Others Captive 38 MW

Solar

Solar Projects PPA based 130 MW

Firm Order Criterion changed from Threshold level of Customer Advance to Certainty of PPA

Orders contingent upon projects getting PPA

Key PPA Developments:
Framework Agreements >1 GW AP: PPAs cleared by Cabinet, tariff ratification pending
KN: Rs. 3.74 / unit tariff notified, PPA process underway
GJ: Pre-bid tie up with customers participating in bid

OMS and SEFL order backlog not included in the above

14 Strong customer tie ups in place

 Steady Growth of Service Business

( Crs.)

Operation and Maintenance Revenues

Growing into a sizeable & profitable business

External OMS revenue is ~21% of total revenue

+0.5%
883 888 (H1 FY18)
Internal 71 70
+0.7%
Annuity like business

Non cyclical (Annuity) nature of business

Steady cash flow generation

External 812 818

100% renewal track record in India

Every turbine sold by us in India is under our Service fold

H1 FY17 H1 FY18 Custodian of >11 GW of assets (US$ 11 bn) in India

22 years of track record in India

15 Stable cash generation

 Net Working Capital And Working Capital Debt

Seasonal build-up of working capital in lean quarters for strong execution in Q4

NWC Days (NWC / LTM Revenues) X 365

Net Working Capital
NWC % (NWC / LTM Revenues) X 100

89 94
83
63 59
51 47

13.9% 17.4% 24.3% 22.8% 12.8% 16.1% 25.8%

Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17

Working Capital Debt (Rs. Crs.)

3,182 3,151 3,244

2,468 2,545
1,894 2,076

Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17

16 Seasonality to normalize under auction regime

 July 2019 FCCB Series Overview

(US$ Mn)

FCCB Principal Value

31% of opening bond balance converted in H1 FY18

547

No. of Shares (Crs.)

Current Outstanding 532
299
Pending Conversion 67

Post Full Conversion 599

248 ( 1,143 Crs*)
76 172 Conversion Details
Price (Per Share) 15.46
Exchange Rate 60.225

Jul14 Conversions March17 Conversions Sep17

Till FY17 in H1 FY18

17 69% FCCBs already converted till date

Note: 1 US$ = 65.28; *Numbers post impact of Ind-AS
 Debt Profile

(Excl. FCCB) 30th Sep17 5 year Maturity Profile

Current bullet maturity of March 2018

4,068 Crs.*
SBLC Backed AERH Debt SBLC facility lenders consented to SBLC extension till 2023
(US$ 626 M)
RBI approval received

( Crs.)
456 Crs.
Other FX Term Debt
(US$ 70 M) 814
731
565
388

78
Rupee Term Debt 2,860 Crs.
FY18 FY19 FY20 FY21 FY22

Non recourse project loan

Solar Project Debt 168 Crs.
Project SPV to be divested

Gross Term Debt 7,552 Crs.

Net Term Debt 6,747 Crs.

18 Back ended maturity profile; Sufficient headroom for operations

Note: 1 US$ = 65.28; *Numbers post impact of Ind-AS
 Technology Update

19
 S111-140 First Turbine Commissioned

First 12 Months PLF

~20% ~5-6%
Higher Energy Yield Higher Energy Yield

~35% PLF ~42% PLF ~44% PLF (Est.)

LCOE reduction LCOE reduction

S97-120 S111-120 S111-140

June14 Mar16 Aug17

Prototype Installation Dates

20 Tallest all steel hybrid tower offering in India

 S111-140: Most Competitive Across Suzlon 2.1 MW Series

17% higher hub height enables:

Accessing better wind profile;
Increasing the attractiveness / viability of the low wind sites
Unlocking unviable sites

Award winning tubular-lattice tower:

Enables to achieve higher hub height at optimized cost
Reduced steel requirement; reduced overall weight
Lower foundation cost
Simplified logistics
24 sq. m. base enhances stability and strength of the structure

Product Development Update

Received Type Certification from TUV NORD
First turbine commissioned at the Gujarat

Surpassing its own benchmark of installing the highest 120 M tower

Tower height greater than 40 storey building

21 Lowers LCOE further; Strong competitive edge

 2.1 MW Series: Proven Platform with >100,000,000 Operating Hours

Higher energy yield Lower cost of energy Sustains Lower Tariffs

>70% Increase in Energy Yield

S88-80 S9X 80/90/100 S97-120 S111-90 S111-120 S111-140

>5.7 GW >2.3 GW >1.0 GW >670 MW 10 MW 1st Turbine

Installed till date Installed till date Installed till date Installed till date Installed till date Commissioned

22 Over 4,500 turbines of 2.1 MW platform across 17 countries

 Next Generation Products

~10% LCOE Reduction

Enables lower tariffs bids

while protecting OEM margins
and Developer returns

S111 S128

Product S128 2.6 MW S128 3.X MW

Rotor Diameter 128 meters 128 meters

Tower Height 120 m - 140 m 86 m - 140 m

Wind Class IEC III (Low Wind) IEC II

Focus Markets Domestic International

Time to Market 2018 2019

23 Committed to lower LCOE

 Global In-House R&D Capabilities

Suzlon Technology Locations:

Hamburg
- Development & Integration
Hamburg
- Certification
Germany
- Development & Integration Rostock
Rostock - Design & Product Engineering
- Innovation & Strategic Research

The Netherlands Hengelo - Blade Design and Integration Hengelo

- Design & Product Engineering

- Turbine Testing & Measurement
Pune
- Technical Field Support Pune
- Engineering
India
Vadodara - Blade Testing Center

Aarhus
Hyderabad - Design & Product Engineering (BOP team)

Chennai - Design & Product Engineering (Gear Box Team)

Aarhus - SCADA Vejle

Denmark
Vejle - Blade Science Center

24 Best match between skills & location Efficient leverage of R&D spending
 Industry Update

25
 Government Strongly Committed to Renewables

Fastest Growing Segment in Power Sector Strong Government Backing due to:

Sustainability: Clean Power

175 GW
15 Others
Scalability: Short execution cycle and quickly deployable
40 Rooftop Solar

Affordability: At Grid Parity (Cheaper than thermal)

60 Grid Solar
Energy security: Self Sufficiency; No import dependency
58 GW

Attracting Foreign Investments: Drawing Investments,

60 Wind
19 GW Pension funds, SWF, Multilateral

2010 2017 2022 Target Green Commitments: 33-35% emission reduction by 2030

26 Annual renewables capacity addition exceeding that of conventional

 Wind Emerging As Most Competitive Source Of Power

Tariff Levels
( /unit)
India APPC 3.48

3.18
2.65 2.64

Coal* Solar# Wind

Equipment Domestic / Imported Largely Imported Made in India

Fuel Domestic / Imported No Fuel Cost No Fuel Cost

Tariff Stability Variable Constant for 25 years Constant for 25 years

Set up Time
~4-5 years ~6-9 months ~6-9 months
(Scalability)

Source: CERC, NTPC, SECI and State bid for Solar

* Coal tariff is of NTPCs average coal plant tariff for FY17
# Solar tariff for Gujarat state bid for 500 MW, received after 2.44 SECI tariff

27 Renewables is now an affordable mainstream source of energy

 Suzlon Strengths in India Wind Market

Full Turnkey Solution Pan India Presence

Provider

Target

Strong Customer
Technology Leadership
Relationship
REGAIN
50%+ MARKET SHARE

Best In Class Service 22+ Years Track Record

Capabilities

28 End-to-end service provider with strong presence across value chain & customer segments
 Increasing Market Share in Growing India Market

India Commissioning Volumes (MW)

37% 24% 19% 19% 26% 32%

+61%
5,502

1,779
+48%

-19% 3,415
3,179
900
1,161 2,312
2,077
1,721 442
403 3,723
415
2,515
2,018 1,870
1,306 1,674

FY12 FY13 FY14 FY15 FY16 FY17

Suzlon Others Suzlon Market Share

Source: MNRE

29 Growing faster than market and peer group

 Surpassed 11 GW Wind Energy Installations In India

Ranked No. 1 in Renewables Sector Largest fleet under Operation and Maintenance fold in India
Ranked No. 2 in Power Sector

(31st Mar17) # of Turbines MW

<= 1 MW 1,678 777
>1 MW < 2 MW 4,268 5,774
=>2 MW 2,258 4,742
Total 8,204 11,293

2.0 GW
35% - All India installed wind capacity
2.4
GW 0.4 GW ~20% - All India installed renewable capacity

~1,800 customer relationships

2.1 GW
0.1 22 years of operating track record
GW
1.5 25 TWh estimated of annual clean energy;
0.8
GW GW =2,030 mn trees planting p.a.

2.1
=~18.5 mn tonnes coal avoidance p.a.
GW =~24.4 mn tonnes CO2 emission savings p.a.

30 Custodian of 2nd highest installed power capacity (from all sources) in India
Map not to scale. All data, information, and map is provided as is without warranty or any representation of accuracy, timeliness or completeness.
 Suzlons Global Presence

As on 30th Sep 2017

2 5
2 1

North
America 6
3 1
2,779 MW
4
Asia
3 5 12,521 MW

South America Europe

806 MW 508 MW 4
South
Africa Australia
139 MW 764 MW
6

31 Suzlons strong relationships across regions positions it well

Map not to scale. All data, information, and map is provided as is without warranty or any representation of accuracy, timeliness or completeness.
 USA PTC Volume: ~500 MW Pipeline Created for 100% PTC Projects

Production Tax Credit (PTC) Extension: Huge Volume Opportunity

PTC in USA extended until 2019 with benefits stepping down every year before phase out

In order to qualify, projects only need to start construction and make a minimum 5% investment

(Safe Harbour Investments)

Thus projects which meet safe harbour investments in 2016, will be eligible for 100% PTC benefit, while projects
which meet safe harbour investments in 2017 will be eligible for 80% PTC benefit

Timeline for completion of the projects is 4 years from the start of construction

Start Construction/Safe Timeline for

Harbor Completion Suzlon Strategy

100% PTC
2016 2020
Established SPVs to implement Safe Harbor
Projects and develop project pipeline
80% PTC
2017 2021 ~500 MW Pipeline created of projects eligible for
100% PTC
60% PTC To translate into firm orders for execution over the
2018 2022
next couple of years

40% PTC
2019 2023

32 Re-entering international market

 Detailed Financials

33
 Consolidated Income Statement

( Crs.)
Particulars H1 FY18 H1 FY17 FY17
Unaudited Unaudited Audited
Revenue from operations 3,852 4,384 12,693
Less: COGS 2,193 2,389 7,543
Gross Profit 1,659 1,995 5,150
Margin % 43.1% 45.5% 40.6%
Employee benefits expense 409 514 1,046
Other expenses (net) 668 745 1,901
Exchange Loss / (Gain) 141 -3 -297
EBITDA 441 739 2,499
EBITDA (Pre-FX Gain / Loss) 582 736 2,203
Margin % 15.1% 16.8% 17.4%
Less: Depreciation 161 173 389
EBIT 280 565 2,110
EBIT (Pre-FX Gain / Loss) 421 563 1,813
Margin % 10.9% 12.8% 14.3%
Net Finance costs 589 568 1,199
Profit / (Loss) before tax -310 -3 912
Less: Exceptional Items -455 0 0
Less: Taxes and Non Controlling Interest 28 17 54
Net Profit / (Loss) after tax 117 -20 858

34
 Consolidated Net Working Capital

( Crs.)

30th Sep17 30th Jun17 30th Sep16

Inventories 4,518 3,952 3,450

Trade receivables 3,131 3,532 3,083

Loans & Advances and Others 1,900 2,051 1,733

Total (A) 9,549 9,535 8,266

Sundry Creditors 3,390 4,594 3,029

Advances from Customers 1,616 945 1,312

Provisions and other liabilities 1,411 1,784 1,624

Total (B) 6,417 7,323 5,965

Net Working Capital (A-B) 3,131 2,212 2,300

35
 Consolidated Balance Sheet

(Rs. Crs.)
Liabilities Sep-17 Mar-17 Assets Sep-17 Mar-17
Shareholders' Fund -6,525 -6,841 Non Current Assets
Non controlling interest 16 9 (a) Property, Plant and Equipment 1,369 1,420
-6,509 -6,833 (b) Intangible assets 181 211
(c) Investment property 33 34
(d) Capital work-in-progress 307 206
1,890 1,871
Non-Current Liabilities
(a) Financial Liabilities (e) Financial assets
(i) Long Term Borrowings 4,409 4,841 (i) Investments 253 189
(ii) Other Financial Liabilities 287 225 (ii) Loans 6 6
(b) Provisions 76 127 (iii) Trade receivables 35 46
(c) Other Non-Current Liabilities 50 40 (iv) Other Financial Assets 931 712
(f) Other non-current assets 113 166
4,823 5,234 1,338 1,118

Current Liabilities Current Assets

(a) Financial Liabilities (a) Inventories 4,518 3,469
(i) Short-term borrowings 3,244 2,076 (b) Financial Assets
(ii) Trade payables 3,390 4,812 (i) Investments 20 481
(iii) Other financial liabilities 4,939* 4,927* (ii) Trade receivables 3,096 3,628
(b) Other current liabilities (iii) Cash and bank balances 176 336
(i) Due to customers 18 17 (iv) Loans 43 49
(ii) Other non-financial liabilities 1,714 1,105 (v) Other financial assets 203 149
(c) Short-term provisions 880 822 (c) Other current assets 1,216 1,059
14,185 13,759 9,271 9,171
Total Equity and Liabilities 12,499 12,160 Total Assets 12,499 12,160
*Includes SBLC backed debt due current maturity in March / April 2018. However, lenders consent
36 as well as RBI approval for extending the SBLC and Debt until 2023 already obtained.
 Key Accounting Policies Revenue Recognition and Order Booking

Opening Order Book

Sales (WTG Revenue Recognition)

(-) Sales during the period WTG revenue is recognised upon transfer of risks and rewards to the buyer of
complete WTG viz: Nacelle, Blade and Tower.

(+) Order Intake during the Order Intake during the period
period Only orders backed by certainty of PPAs

Closing Order Book

Closing Order Book
Represents MW value of contract against which no revenue is recognized in the
income statement

37 Adherence to best accounting and reporting practices

 Key Accounting Policy: Maintenance Warranty Provisions

Maintenance Warranty Provisions

Accounting Policy:

Comprise of provisions created against maintenance warranty issued in connection with WTG sale

Created when revenue from sale of wind turbine is recognized

Provisions estimated based on past experience

Reversals of unused provision on expiry of Maintenance warranty period

Global Wind Industry Standard Practice:

Followed by top listed global industry leaders

Despite Insurance and back to back warranty from suppliers

38 Adherence to best accounting and reporting practices

CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447

THANK YOU

39